UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 10-QSB
(X) Quarterly report pursuant to Section 13 or
15(d) of the Securities and Exchange Act of
1934.
For the quarterly period ended September 30, 2000.
( ) Transition report pursuant to Section 13 or 15(d) of the
Exchange Act for the transition period from _________ to
_________ .
Commission File Number:
PR SPECIALISTS, INC.
(Exact name of registrant as specified in charter)
Delaware 95-4792965
(State of Incorporation) (I.R.S. Employer I.D. No)
6041 Pomegranate Lane
Woodland Hills, California 91367
(Address of Principal Executive Offices)
(818) 992-7999
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant: (1) has filed all reports required to be filed by
Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES (x ) NO ( )
Indicate the number of shares outstanding of each of the issuer's classes of
stock as of September 30, 2000.
4,500,000 Common Shares
Transitional Small Business Disclosure Format:
YES ( ) NO (X)
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PR SPECIALISTS, INC.
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Balance Sheet as of September 30, 2000 ................................... 3
Statements of Operations for the three months ended September
30, 2000 and the period March 21, 2000 (date of incorporation)
to September 30, 2000..................................................... 4
Statement of Stockholders' Deficit for the nine months ended
September 30, 2000........................................................ 5
Statements of Cash Flows for the three months ended September 30, 2000 and
the period March 21, 2000 (date of
incorporation) to September 30,2000....................................... 6
Notes to Financial Statements............................................. 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations or Plan of Operations............................. 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................... 11
Item 2. Changes in Securities................................................ 11
Item 3. Defaults Upon Senior Securities...................................... 11
Item 4. Submission of Matters to a Vote of Securities Holders................ 11
Item 5. Other Information.................................................... 11
Item 6. Exhibits and Reports on Form 8-K..................................... 11
Signatures................................................................... 11
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PR SPECIALISTS, INC.
(A Development Stage Enterprise)
BALANCE SHEET
September 30,
2000
(Unaudited)
-----------
ASSETS-
Cash. $ 740
---------
Total. $ 740
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT:
LIABILITIES - Due to affiliates $ 7,486
STOCKHOLDERS' DEFICIT:
Preferred stock - $0.001 par value;
5,000,000 shares authorized;
no shares issued and outstanding -
Common stock - $0.001 par value;
20,000,000 shares
authorized; 4,500,000 shares
issued and outstanding 4,500
Additional paid in capital 900,584
Deficit accumulated during the development stage (911,830)
---------
Total stockholders' deficit (6,746)
---------
Total $ 740
=========
SEE NOTES TO FINANCIAL STATEMENTS.
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PR SPECIALISTS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
March 21,
2000
Three Months (date of
Ended incorporation)
September 30, to September 30,
2000 2000
------------- -------------
REVENUES: $3,190 $ 12,140
EXPENSES:
Professional fees
related party 0 1,500
Technology and content 0 3,000
Stock based compensation
related party 0 900,000
Organization costs 0 584
Marketing 0 8,950
Professional fees 2,416 6,395
Office supplies 1,849 3,541
------ --------
TOTAL EXPENSES: 4,265 923,970
NET LOSS $(1,075) $(911,830)
========= ==========
NET LOSS PER SHARE $ 0.00 $ 0.20
========= ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING -
BASIC AND DILUTED 4,500,000 4,500,000
============ ===========
SEE NOTES TO FINANCIAL STATEMENTS.
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PR SPECIALISTS, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' DEFICIT
For the period March 21, 2000 (date of incorporation) to
September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Deficit
accumulated
...... Additional during the
Common Stock paid-in development
Shares Value capital stage Total
--------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balances, March 21, 2000
(date of incorporation) - $ - $ - $ - $ -
Issuance of common stock 4,500,000 4,500 895,500 - 900,000
Capital contribution from
shareholders - - 584 - 584
Services contributed by
shareholders - - 4,500 - 4,500
Net loss for the period
March 21, 2000 (date of
incorporation) to
September 30, 2000 - - - (911,830) (911,830)
-------- --------- --------- ---------- ---------
Balances, September 30, 2000 4,500,000 $ 4,500 $900,584 $(911,830) $ (6,746)
========= ========= ========= ========== =========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
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PR SPECIALISTS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(Unaudited)
March 21, 2000
Three Months (date of
Ended incorporation)
September 30, to September 30,
2000 2000
-------- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $ (1,075) $ (911,830)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Non cash expenses 0 904,500
---------- -------------
CASH FLOWS USED IN FINANCING
ACTIVITIES (1,075) (7,330)
---------- -------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from issuance of stock 0 584
Increase in due to affiliates 1,815 7,486
---------- -------------
CASH PROVIDED BY FINANCING
ACTIVITIES 1,815 8,070
---------- -------------
NET INCREASE IN CASH
AND CASH EQUIVALENTS 740 740
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 0 0
---------- -------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 740 $ 740
========== =============
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Interest paid $ - $ -
========== =============
Taxes paid $ - $ -
========== =============
SEE NOTES TO FINANCIAL STATEMENTS.
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PR SPECIALISTS, INC
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - FORMATION AND OPERATIONS OF THE COMPANY
PR Specialists Inc. ("we", "us", "our") was incorporated under the laws of the
state of Delaware on March 21, 2000. The Company, which is considered to be in
the development stage as defined in Financial Accounting Standards Board
Statement No. 7, is a publicity services firm intending to serve small to medium
size companies. The planned principal operations of the Company have not
commenced, therefore accounting policies and procedures have not yet been
established.
Use of Estimates
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements. The
reported amounts of revenues and expenses during the reporting period may be
affected by the estimates and assumptions management is required to make. Actual
results could differ from those estimates.
Technology and Content
Technology and content expenses are expensed as incurred and consist principally
of payroll and related expenses for development, editorial systems and
telecommunications operations personnel and consultants, system and
telecommunications infrastructure and costs of acquired content.
Our accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the instructions to Form 10-QSB and Rule 10-1 of Regulation S-X of the
Securities and Exchange Commission (the "SEC") Accordingly, these financial
statements do not include all of the footnotes required by generally accepted
accounting principles. In the opinion of management, all adjustments (consisting
of normal and recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the three and nine-month
ended September 30, 2000 are not necessarily indicative of the results that may
be expected for the year ended December 31, 2000.
NOTE B - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. We have an accumulated deficit of
$911,830 as of September 30, 2000. We do not currently engage in business
activities that provide any cash flow. Accordingly our ability to continue as a
going concern is dependent on our ability to raise capital to fund our cash
requirements until our business operations provide sufficient cash flow. These
factors among others may indicate that we will be unable to continue as a going
concern for a reasonable period of time.
The financial statements do not include any adjustments that might be necessary
if we are unable to continue as a going concern.
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NOTE C - INCOME TAXES
During the period March 21, 2000 (date of incorporation) to September 30, 2000,
the Company recognized losses for both financial and tax reporting purposes.
Accordingly, no deferred taxes have been provided for in the accompanying
statement of operations.
At September 30, 2000, the Company had a net operating loss carryforward of
approximately $12,000 for income tax purposes. This carry forward is available
to offset future taxable income through the period ended December 31, 2020. The
deferred income tax asset arising from this net operating loss carryforward is
not recorded in the accompanying balance sheet because the Company established a
valuation allowance to fully reserve such asset as its realization did not meet
the required asset recognition standard established by SFAS 109.
NOTE D - RELATED PARTY TRANSACTION
The Company issued 4,500,000 shares of its common stock upon incorporation to
its founders. The value of these shares, which was based on the Company's
expected initial offering price of $0.20 per share, has been included in the
accompanying statement of operations as stock based compensation expense.
On March 21, 2000, the Company executed a one year employment contract with its
President, which requires annual compensation of approximately $65,000 plus
certain bonuses and fringe benefits (as defined in the agreement). The agreement
shall become effective upon the date on which the Company has issued more than
$100,000 of its stock or when client revenues are sufficient to provide a full
or partial salary. Services provided prior to such time will be recorded as an
expense in the accompanying statement of operations and as a capital
contribution in the accompanying statement of stockholders' equity.
During the period March 21, 2000 (date of incorporation) to September 30, 2000,
and for the time prior to incorporation, the Company's President provided
various equipment, technology and content services and a portion of his home for
office space for consideration of $3,000 and the Company's other shareholder
provided services for consideration of $1,500, including time spent prior to
incorporation. The value of this equipment, services and office space have been
recorded as operating expenses and as a capital contribution.
NOTE E - LOSS PER SHARE
We compute net loss per share in accordance with SFAS No. 128 "Earnings per
Share" ("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98").
Under the provisions of SFAS No. 128 and SAB 98, basic net loss per share is
computed by dividing the net loss available to common stockholders for the
period by the weighted average number of common shares outstanding during the
period. Diluted net loss per share is computed by dividing the net loss for the
period by the number of common and common equivalent shares outstanding during
the period. As of September 30, 2000 there were no common equivalent shares
outstanding, as such, the diluted net loss per share calculation is the same as
the basic net loss per share.
NOTE F - PROPOSED COMMON STOCK OFFERING
In April 2000 the Company filed a registration statement with the Securities and
Exchange Commission to sell up to 3,125,000 shares of its common stock for $0.20
per share. As many as 1,562,500 of these shares may be issued in exchange for
services. The offering will be on a best-efforts, no minimum basis. As such,
there will be no escrow of any of the proceeds of the offering
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and the Company will have the immediate use of such funds to finance its
operations. Cost of the offering, estimated to be $50,000, will be recorded as a
reduction of the amount of contributed capital. The Company's existing
shareholders have agreed to pay these costs, which will be recorded as a loan
from such shareholders and will be repaid through cash derived from operations
or the sale of shares or through the issuance of common shares.
During April and May 2000, the Company entered into various barter transactions
whereby certain publicity services, with an approximate value of $9,000, were
provided to initial customers in exchange for content and reference services.
The value of such arrangements will be recorded as revenue and as an expense, at
their fair value of services involved, in the periods such services are
provided.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
balance sheet as of September 30, 2000 and the statements of operations, cash
flows and stockholders' deficit as of and for the three ended September 30,
2000, and the period March 21, 2000 (date of incorporation) to September 30,
2000 included with this Form 10-QSB. The Company did not have significant
operations during the three months ended September 30, 2000 or for the period
March 21, 2000 (date of incorporation) to September 30, 2000 and as such this
analysis does not include any additional discussion as of and for such periods.
We are considered to be in the development stage as defined in Financial
Accounting Standards Board Statement No. 7, and have neither engaged in any
operations nor generated any significant revenues to date. We have limited
assets. Our cash expenses for the three months ended September 30, 2000 and the
period March 21, 2000 (date of incorporation) to September 30, 2000 are $4,265
and $10,520, respectively. We funded these losses primarily through shareholder
contributions. Our cumulative expenses from March 21, 2000 (date of
incorporation) to September 30, 2000 are $10,520.
The expenses we have incurred to date are primarily from our efforts to
establish clients and begin our business operations. So long as we are able to
sell shares of our common stock we believe will have sufficient funds to satisfy
our cash requirements.
Readers are referred to the cautionary statement, which addresses
forward-looking statements made by the Company.
CAUTIONARY STATEMENT
This Form 10-QSB, press releases and certain information provided periodically
in writing or orally by our officers or our agents contain statements which
constitute forward-looking statements within the meaning of Section 27A of the
Securities Act, as amended and Section 21E of the Securities Exchange Act of
1934. The words expect, anticipate, believe, goal, plan, intend, estimate and
similar expressions and variations thereof if used are intended to specifically
identify forward-looking statements. Those statements appear in a number of
places in this Form 10-QSB and in other places, particularly, Management's
Discussion and Analysis or Plan of Operations, and include statements regarding
the intent, belief or current expectations us, our directors or our officers
with respect to, among other things: (i) our liquidity and capital resources;
(ii) tour financing opportunities and plans and (iii) our future performance and
operating results. Investors and prospective investors are cautioned that any
such forward-looking
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statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors. The
factors that might cause such differences include, among others, the following:
(i) any material inability of us to successfully internally develop its
products; (ii) any adverse effect or limitations caused by Governmental
regulations; (iii) any adverse effect on our positive cash flow and abilities to
obtain acceptable financing in connection with its growth plans; (iv) any
increased competition in business; (v) any inability of us to successfully
conduct its business in new markets; and (vi) other risks including those
identified in our filings with the Securities and Exchange Commission. We
undertake no obligation to publicly update or revise the forward looking
statements made in this Form 10-QSB to reflect events or circumstances after the
date of this Form 10-QSB or to reflect the occurrence of unanticipated events.
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PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Securities Holders
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
NONE
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
November 2, 2000 /s/ Bryan Eggers
Date Bryan Eggers, President
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